Australia: Meetings for barley growers against ABB Grain monopoly over barley exports

A series of meetings for barley growers began on Monday, February 20, in South Australia that could ultimately result in ABB Grain Ltd. (ABB.AU) being stripped of a monopoly over barley exports from the state, according to Dow Jones News’ communication.

The three meetings have been called to explain and discuss the range of barley marketing options available to the industry, according to a statement by the South Australian Farmers' Federation.

After the meetings, the federation will conduct a grower ballot to see if the state's barley export monopoly, or single desk as it's known locally, should continue in its present form, be modified or deregulated, a spokesman for ABB Grain said in an interview late last week. "The single desk is at risk," Michael Iwaniw, ABB Grain's managing director, said in a letter to growers.

The meetings were organized after growers in the state questioned the value of the monopoly after a sharp fall in barley prices in December, with higher prices available in the other two major barley producing states, Western Australia and Victoria.

ABB Grain representatives will attend the meetings to explain how the company's collective sales and pooled return arrangements work, its spokesman said.

The company will tell growers that while spot prices will fluctuate, the sales pools operate over a 12-18 month shipping period until all the grain is sold and that prices growers receive are linked to world prices, with prices over time pretty much the same everywhere adjusted for freight differences, he said.

South Australia is estimated to have produced 2.7 million metric tons of the national barley output of 9.9 million tons this crop year ending March 31, according to an official forecast issued last week.

About 80% of the grain is exported, with feed grade typically destined for the Middle East and malting grade mostly heading to Asia, especially China. The monopoly is one of the last of this type of arrangement that formerly dominated agricultural marketing in Australia.

The future of the biggest, an export monopoly over wheat operated by AWB Ltd. (AWB.AU), is under a cloud following revelations about kickbacks it paid to Saddam Hussein's regime during a United Nations oil-for-food program.

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